Will Sensex, Nifty extend yesterday’s correction? 5 things to know before today’s opening bell

Stock markets slipped on Wednesday amid weaker global cues and profit-booking by investors. S&P BSE Sensex closed 400 points lower at 51,703 while the 50-stock NSE Nifty ended the day 104 points down at 15,208. Although the benchmarks slipped, broader markets did show some strength during the day’s trade as midcap and smallcap indices closed in the positive territory. Volatility index or the fear gauge of domestic equities, slipped more than 1% to move below 22 levels. On Thursday morning, SGX Nifty was trading with gains. Stock markets could witness volatility owing to the weekly expiry today.

Global watch: Once again on Wall Street, Dow Jones gained while S&P 500 and NASDAQ ended in the red. Among Asain equity markets, Shanghai Composite was up in the green, while Hang Seng, TOPIX, KOSPI, and KOSDAQ were down with losses. Nikkei 225 was trading flat with a positive bias.

Technical take: Wednesday’s session on Nifty formed a Bearish candle on the daily scale, according to Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services. He added that Nifty’s moving pattern has now negated its formation of higher highs – higher lows of the last four trading sessions. But, the strength in the broader markets is where Nagaraj Shetti, Technical Research Analyst at HDFC Securities finds hope. However, in the coming sessions, Shetti expects more correct with high volatility.

Support and Resistance levels: In terms of levels that investors should keep an eye on, Shrikant Chouhan, Executive Vice President at Kotak Securities said that moving below 15170/51550 levels, markets could fall to 15080/51350 or 14980/51250. “A decisive break of 15330/51330, would result in a sharp pullback to 15450/52500 levels. The strategy should be to buy in deep panic around 15000/51200 levels with a stop loss at 14900/50900 levels,” he added.

IPO watch: Nureca’s initial public offering closed for subscription yesterday with bids for 39.93 times the issue. Retail investors bid for the IPO a massive 166.65 times. Today, RailTel’s initial public offering closes. The Rs 820 crore issue has so far been oversubscribed by all portions, with retail investors bidding for 10.54 times their quota. QIBs and NIIs have also oversubscribed the public issue nearly 3 times each. Employees of the firm have bid for 1.85 times their portion.

FII and DII activity: Foreign Institutional Investors (FII) pumped in Rs 1,008 crore into stock markets yesterday. FIIs were also bet buyers of Index option but were seen pulling money away from Index futures and Stock futures and options. Domestic Institutional Investors (DII) pulled Rs 1,283 crore away from domestic securities.